Security & Fraud

Brazil Bank Managers Suspected Of Money Laundering Involvement

Banco do Brasil

Police in Brazil have raided the residences of managers of Banco do Brasil in connection to their part in a money-laundering scam worth $48 million.

Reuters is reporting that the raids are the latest part of the investigation of the scheme. Police are looking into accusations that the managers were a part of laundering the money between 2011 and 2014. 

The bank said it had already started investigating the matter internally and that more employee firings may be on the horizon. Banco do Brasil said it’s fully cooperating with the authorities on the matter.

When the news of the raids were made public, the bank’s shares dropped 1 percent, but quickly rebounded. 

The money was allegedly used for bribes for contracts with Petroleo Brasileiro, which is the country’s state-run oil company. Banco do Brasil’s internal investigation revealed even more evidence that it shared with prosecutors about the malfeasance. 

The bank managers allegedly turned off money-laundering detection systems for some of the transactions, effectively blocking the actions from the Council for Financial Activities Control (COAF), which is a key organization for flagging suspicious activity flowing through the country’s financial ecosphere. 

The managers come from three different branches of the bank, and warrants are being served in Sao Paulo city and Natal to the north. Police are also looking into the addition of a money changer who helped to facilitate cash for the bribes.

In other Brazil news, Amazon Prime rolling out in Brazil caused some shares of eCommerce companies doing business in the country to drop. 

Amazon is offering unlimited nationwide free shipping to Prime subscribers in Brazil for a monthly price of 9.90 reais (or $2.42). The company promises two-day shipping in 90 cities and perks that include access to the full content of its Prime video streaming service as well as music, digital books and magazines.

Amazon launched in Brazil in 2012, initially selling books and then adding more items, going up against established local eCommerce rivals including Magazine Luiza and Mercado Libre. Both companies saw shares drop over 4 percent with the news of Amazon bringing Prime to the country.

“We went as fast as possible and as slowly as necessary,” said Jamil Ghani, Amazon Prime international vice president.


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